The Coca‑Cola Company is set to appeal a recent U.S. Tax Court ruling imposing a liability of approximately $6 billion, including interest. This decision stems from a longstanding dispute with the U.S. Internal Revenue Service over the allocation of income from foreign affiliates for the years 2007-2009. Coca‑Cola disputes the IRS’s interpretation and plans to file an appeal within 90 days to the Eleventh Circuit Court. The company remains confident in prevailing and is committed to transparency throughout the legal process.
Background of the Dispute
In 2015, Coca‑Cola received an IRS notice seeking $3.3 billion in additional federal income tax. The IRS aimed to reallocate over $9 billion of income to the U.S. parent company from foreign affiliates, retroactively altering a previously agreed methodology. This led to the U.S. Tax Court predominantly siding with the IRS in 2020 and again in a related 2023 opinion.
Coca‑Cola Appeal and Response
Coca‑Cola believes that the IRS and the U.S. Tax Court have misapplied regulations. The company plans to pay the agreed liability and interest while it appeals the decision. The appellate process offers Coca‑Cola an opportunity to defend its position vigorously. The company has provided guidance on potential outcomes in its recent SEC filings, reflecting its commitment to transparency.
Forward-Looking Statements and Risks
Coca‑Cola’s press release includes forward-looking statements about the ongoing tax dispute. The company highlights risks such as changes in tax laws and rates, and the potential unfavorable resolution of tax matters. These risks are detailed in Coca‑Cola’s SEC filings, which are accessible for further information.
